Over 5,400 American citizens living overseas renounced their citizenship last year – a 26 per cent jump on 2015 – because of America’s tax laws.
The US and Eritrea in northeast Africa are the only countries in the world that tax people based on citizenship, not where they live.
In 2010, the US enacted the Foreign Account Tax Compliance Act which requires citizens to file yearly reports on non-US accounts and foreign banks to report on the holdings of all US taxpayers to the IRS.
Bizarre tax laws to blame for exodus
Since then, the number of people saying goodbye to ‘Uncle Sam’ has risen dramatically, from less than 1,000 in 2011 to 4,279 in 2015.
UK politician and former London Mayor Boris Johnson was one who sacrificed his US passport last year after being forced to pay more than $50,000 in US tax on the sale of his London home in 2014.
It’s not cheap to give up US citizenship. The fee is US$2,350 (AUD$3,133) – the highest fee in the world for renouncing citizenship.
And you may not be allowed back either – if the US Government finds that a person renounced their citizenship to avoid paying taxes, they can bar you from re-entry.
Though perhaps in light of the current political climate, that’s not a bad thing (my opinion).
